Saturday, October 13, 2007

German watchdog rules against RWE on carbon profit

What a racket.From Reuters:

Germany's federal cartel office said on Thursday it had settled consumer complaints about utility RWE's practice of adding to power prices in 2005 the cost of freely obtained carbon emission rights by forcing RWE to auction 6,300 megawatts of capacity over four years.

The cartel office also said it upheld rights to take further steps against RWE's power pricing for industrial customers.

It said it was in constructive talks with RWE peer E.ON (EONG.DE) in a similar case about consumer charges that E.ON in 2005 overcharged consumers for the cost of CO2 permits.

The cartel office said the capacity auctions at current prices represented a value of 2.581 billion euros ($3.65 billion)....MORE

Meanwhile the other electricity giant E.ON says with a straight face Europe should delay auctioning emissions permits for thirteen more years.

Big brass ones or criminal collusion with politicians and pseudo-competitors?

Power companies should by 2020 have to buy all their permits to emit carbon dioxide under the European emissions trading scheme rather than receiving them for free, the head of Germany's E.ON AG said on Thursday.

Chief Executive Wulf Bernotat said he favored a gradual implementation of full auctioning or selling of carbon allowances from 2013, when the third phase of the scheme is slated to start, to 2020.

He also called for a more harmonized way of distributing the permits across the 27-nation bloc instead of the current method under which each EU nation draws up its own national allocation plan (NAP).

"It's important for the conditions in Europe to be similar," Bernotat told reporters. "Twenty-seven NAPs don't help in building a European trading system."

The European Commission is studying ways to revamp the scheme, its key tool to fight climate change and meet commitments to cut greenhouse gas emissions under the Kyoto Protocol.

It plans to present new legislative proposals in December and has indicated that a more centralized system and a higher proportion of auctioning were likely to be part of the revision.